More than two weeks after Bathla Group entered voluntary administration, the company is still standing.
But only just.
Since Teneo took control of the Western Sydney developer, the administration has lurched from one deadline to the next as it scrambles for cash.
At several points in these frantic first weeks, shutdown loomed.
Each time, Bathla found enough money to survive a little longer.
Its latest reprieve came on Monday, when five lenders agreed to provide between $3 and $5 million to keep a much smaller Bathla running for another two weeks.
Construction on projects not backed by the five participating lenders has been suspended by the company, although individual lenders may take control of projects and continue construction separately under a different building licence.
More than 60 per cent of Bathla's roughly 350 staff have been stood down.
The reprieve is a long way from the roughly $20 million the administrators initially said was needed to keep construction operating for five weeks.
What remains is a substantially smaller operation keeping about 14 projects moving while the fate of the rest of the group is increasingly decided elsewhere.
The break-up is already underway
With only five of around 40 lenders funding Bathla's continued operation, others are increasingly taking control of the projects securing their loans.
This week, 360 Capital Mortgage REIT escalated efforts to recover $31.7 million across four Bathla-linked loans, with receivers appointed over three and being pursued over the fourth.
For most of the properties, the strategy is to sell them down. But one loan is secured against 72 near-complete apartments, where lenders are working to get the project to occupancy so existing pre-sales can settle before the remaining apartments are sold.
Ray White Capital, billionaire property investor Bob Ell’s Leda, Balmain and Woodbridge Capital are some of the lenders that have appointed receivers or otherwise taken control of individual projects.
There is nothing unusual about secured lenders enforcing their rights in a property insolvency.
Property development is often financed project by project, with lenders holding security over particular land or developments.
What sets Bathla apart is the sheer scale on which that process is now playing out; dozens of lenders, hundreds of companies and more than 200 sites.
So while Bathla remains in voluntary administration as a group, what happens from here is increasingly being decided project by project.
That means there may be no single outcome for subcontractors and buyers caught up in the collapse.
A subcontractor owed money for work already completed may still have to pursue that debt through the administration, even if a receiver takes control of the project and hires someone else to finish it.
For buyers, the outcome will depend heavily on their individual development, including whether it continues, is sold or refinanced, and the terms of their contract.
And the further that project-by-project process advances, the harder it may become to put Bathla back together in anything resembling its previous form.
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Is there still another way out?
That does not mean parts of Bathla cannot still be rescued or restructured.
Under voluntary administration, Teneo must investigate the options for Bathla's future and ultimately recommend the course it believes would produce the best outcome for creditors compared with liquidation.
That has included considering proposals to refinance or restructure parts of the group.
One such proposal emerged this week, involving around 25 land-only Bathla sites worth about $1 billion and funding from an unidentified Japanese investor-backed syndicate, according to Renown Wealth, which had been coordinating the proposed refinance on behalf of the investors.
The proposal would have refinanced debt attached to those projects through Buildwell Australia Pty Ltd, whose directors include Rohit Bathla, the son of Bathla founder Bhart Bhushan. Buildwell Australia is not in administration.
But on Friday afternoon, the private credit investment manager said the offer had been withdrawn.
Renown said the parties had been unable to agree on key conditions, including the corporate structure of the proposed deal and obtaining fresh valuations of the sites. It also raised concerns about the proposed continuing involvement of Bathla founder Bhart Bhushan.
The government is not offering a circuit-breaker
The NSW government has made clear it sees Bathla's future as a matter for its lenders.
Treasurer Daniel Mookhey said the government would focus on protecting buyers and keeping homes under construction where possible, but would not use taxpayer money to bail out private-credit lenders.
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That leaves Teneo and Bathla's lenders to work through interests that do not always align.
For the administrators, the task is to preserve value across the group.
For individual secured lenders, the question is narrower — whether continuing to fund Bathla or a particular project will produce a better recovery than taking control of the secured asset itself.
Increasingly, some are choosing the latter.
